Financials, miners and technology stocks have dropped after the UK stock market fell for the third day on fears of slowing economic growth and Mark Carney (pictured), governor of the Bank of England, compared the potential impact of a Brexit ‘no-deal’ to a 1970s-style oil shock.
The FTSE 100 extended its earlier decline, down 1% or 71 points to 6,929, as Wall Street opened sharply lower as reports of Apple’s production cuts continued to hit tech stocks and investors’ nerves were further frayed by US retailers releasing poor forecasts for the holiday quarter.
The S&P 500 slid 1.8% to 2,641 and the technology Nasdaq index dropped 2.1% to 6,495 while in Europe the FTSEurofirst 300 shed 1.3% to 1,382.
Geared technology-exposed investment trusts were among the big fallers. On the FTSE 100 Scottish Mortgage Trust (SMT) tumbled 4% or 19p to 455.8p, while lower down the market Allianz Technology Trust (ATT) slid 5.8% or 75p to £12.25 and Baillie Gifford US Growth (USA) dropped 4.5% or 5.2p to 111.6p.
CYBG (CYBGC) was the biggest faller among lenders, slumping 16% or 40p to 208.6p, after the Clydesdale and Yorkshire Bank owner made another hefty provision against mis-sold payment protection insurance and started contingency measures to prepare for a hard exit from the European Union.
Carney angered Brexiteers when he told MPs he supported prime minister Theresa May’s draft withdrawal agreement and said the lack of a transition would hurt the UK economy.
‘This would be a very unusual situation. It is very rare to see a large negative shock in an advanced economy. You would have to stretch back at least in our analysis until the 1970s to find analogies,’ he said.
BTG (BTG) provided some cheer as shares in the specialist healthcare company soared 34% on a £3.3 billion bid approach from US medical device maker Boston Scientific. This is good news for embattled fund manager Mark Barnett who holds the stock in both his Edinburgh (EDIN) and Perpetual Income & Growth (PLI) trusts.
Sterling slid 0.19% against the dollar to $1,2825 amid the Brexit uncertainty as BNY Mellon’s chief currencies strategist, Simon Derrick, predicting it could hit as low as $1.10 if the UK crashed out of the EU without a deal.